Here’s Why Snap Inc. (SNAP) Crashed on Wednesday

We recently compiled a list of the 10 Firms Defy Wednesday’s Broader Market Optimism. In this article, we are going to take a look at where Snap Inc. (NYSE:SNAP) stands against the other stocks.

Wall Street extended its winning streak on Wednesday, with all of its main indices closing in the green territory, as investors seemed to have already factored in the news of tariffs imposition alongside uncertainties surrounding the Artificial Intelligence industry.

The Dow Jones gained another 0.71 percent, the S&P 500 grew 0.39 percent, and the tech-heavy Nasdaq increased by 0.19 percent.

Ten companies, however, defied a broader market optimism, mostly due to disappointing earnings results. This article details the reasons behind the drop in their share prices and latest earnings performance.

To come up with Wednesday’s biggest losers, we considered only the stocks with at least $2 billion in market capitalization and $5 million in daily trading volume.

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Snap Inc. (NYSE:SNAP)

Snap Inc. shares dropped 8.36 percent on Wednesday to end at $10.63 apiece despite announcing improvements in its earnings performance in the fourth quarter and full year of 2024.

In a statement, Snap Inc. said it swung to a net income of $9.1 million in the fourth quarter of 2024, reversing a $248 million net loss in the same period a year earlier. However, it remained at a net loss of $698 million in the full year 2024, albeit a 46-percent improvement from the $1.3 billion net loss in 2023.

Revenues for the quarter increased by 14.7 percent to $1.56 billion from $1.36 billion year-on-year, while revenues for the full year marked a growth of 16.5 percent at $5.36 billion from $4.6 billion in 2023.

For the first quarter of the year, Snap said it projects revenues to settle between $1.33 billion and $1.36 billion, as well as adjusted EBITDA between $40 million and $75 million.

Overall SNAP ranks 6th on our list of Wednesday’s top losers. While we acknowledge the potential of SNAP as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than SNAP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

Disclosure: None. This article is originally published at Insider Monkey.